Mumbai builders must keep 20% area for affordable housing

MUMBAI: Builders developing a housing project on a 4,000 sq m (acre) plot must reserve 20% of the area for affordable housing, according to a state government notification issued last week. It will not be applicable to schemes where commencement certificates were issued on or before November 8, 2013.

The developer will receive 20% extra floor space index (FSI) as an incentive for the 20% reservation for public housing.

It will benefit low income groups (LIG) and economically weaker sections (EWS), who will be allotted the 323-538 sq ft tenements through a lottery by Mhada, the state housing authority. The scheme will create more housing stock at a time when Mhada does not have much land with it here.

The notification said that when the developer intimates Mhada about granting of an occupation certificate (OC) by the planning or civic body to his newly built apartments, Mhada has to decide within six months if it will purchase the 20% tenements or allot them to those selected through a lottery system. In case of plot, if Mhada declines to purchase it within six months, he can sell them in the open market, for which additional FSI will not be permissible.

In case of tenements, the developer or land owner has to sell plots of flats to Mhada or allottees selected by Mhada at construction rates decided by the inspector-general of registration, Pune, under annual statement of rates in the year of the scheme’s approval. “The developer has to first get an OC for affordable housing, then only will he get an OC for the other 80% housing, which he can sell in the open market at market rates,” a senior urban development official explained.

The developer has been permitted to utilize one-fourth of the 20% FSI earmarked for affordable housing towards construction of service quarters on the same plot but in a separate block, which has to be sold by the developer as service quarters in the open market under the scheme.

“There will be no obligation on schemes to build such housing wherein more than 20% of the area including FSI has to be utilized towards construction of tenements for EWS, LIG or middle-income groups (MIG),” the notification stated.

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